ECON-1010-D1/D2-Introduction to Microeconomics Course Materials & Test Answers | moodle.uleth.ca

Use the table below to answer the following question.

Table 11.2.4

Price (dollars per box)	Quantity demanded (thousands of boxes per week)
3.65	500
5.20	450
6.80	400
8.40	350
10.00	300
11.60	250
13.20	200

Quantity (boxes per week)	Marginal cost (dollars per additional box)	Average variable cost (dollars per box)	Average total cost (dollars per box)
200	6.40	7.80	12.80
250	7.00	7.00	11.00
300	7.65	7.10	10.43
350	8.40	7.20	10.06
400	10.00	7.50	10.00
450	12.40	8.00	10.22
500	20.70	9.00	11.00

Refer to Table 11.2.4. The market is perfectly competitive and there are 1,000 firms that produce paper.

The top table sets out the market demand schedule for paper.

Each producer of paper has the costs shown in the bottom table when it uses its least-cost plant size.

The market price is ________ a box and the market output is ________ boxes. The output produced by each firm is ________ boxes. Each firm ________.

$8.40; 350,000; 350; makes zero economic profit

$7.00; 250,000; 250; incurs an economic loss of $1,000 a week

$7.65; 350,000; 300; makes zero economic profit

$7.65; 300,000; 300; incurs an economic loss of $834 a week

100%

$8.40; 350,000; 350; incurs an economic loss of $581 a week

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